Financial Daily from THE HINDU group of publications
Thursday, Feb 19, 2004

News
Features
Stocks
Cross Currency
Shipping
Archives
Google

Group Sites

Industry & Economy - Power


Nagarjuna Power seeks tariff approval for supply to Kerala

C. Shivkumar

Currently, the tariff based on current cost and exchange rates was estimated to be in the region of Rs 2.35 a unit.

Bangalore , Feb 18

NAGARJUNA Power Corporation Ltd (NPCL), which is setting up the 1015 MW Mangalore project, has sought the Central Electricity Regulatory Commission's (CERC) approval for tariffs for power supplies to Kerala.

Sources said that currently the estimated tariff for the project based on current cost and exchange rates was estimated to be in the region of about Rs 2.35 a unit.

The tariff is based on current exchange rates and international coal prices.

However, the sources added, these estimates could undergo a change. An appreciation of the exchange rate, the sources would bring the tariff down further, they added.

The sources said that the new tariffs had been fixed on the basis of a 16 per cent rate of return on a 80 per cent plant load factor, as against the original norm of 68.5 per cent PLF.

Besides, the incentive element was also brought down to 0.4 per cent for every increase in the PLF, as against the original norm of 0.7 per cent.

The original norms were fixed on the basis of the two-part power tariff notification issued in 1992.

These changes would have to be incorporated in to power purchase agreement signed with Karnataka Power Transmission Corporation Ltd (KPTCL). The sources said that at the last meeting, this week, the financial institutions had set the tentative deadline of April this year for the project's wet financial closure. Wet financial closure implied the readiness of the project lenders to release the debt funds.

By this date, NPCL, the sources said, would have finalised the strategic equity investor in the project. The strategic investor is expected to bring in at least 49 per cent stake, though the major stakeholders in the project would be Nagarjuna Fertiliser Corporation Ltd and its group companies. These entities together would continue to hold about 51 per cent of the project equity.

The overall project cost is currently estimated at Rs 4,400 crore for a greenfield project. The sources said that the financial institutions had accepted the payment security mechanism (PSM) cleared by the Karnataka State Government for meeting the project debt financing amounting to about Rs 3,080 crore.

The approved PSM included an irrevocable letter of credit up to 85 per cent of the PLF, an escrow cover for 70 per cent of the project cost (project debt) and a State Government guarantee.

Power Finance Corporation (PFC), the sources said had also agreed to finalise the covenants for the deferred payment guarantees (DPG) on the basis of cleared PSM.

PFC is also the lead arranger for the for project debt. The DPG was required for funding of the engineering procurement and construction contract.

The estimates included the cost of the flue gas desulphurisation plant, in line with guidelines of the Environment Ministry and the coal handling facilities near the project site, the sources added.

Coal is to be supplied by PT Adaro of Indonesia and Rio Tinto of Australia. PT Adaro is among the world's largest suppliers of "Enviro coal" or low-sulphur coal (0.1 per cent sulphur and 1.2 per cent ash). The clearances would ensure the project commissioning before the end of the current Plan period.

When completed in 2005, the NPCL project would be the first private sector mega power station in the southern region.

More Stories on : Power | Kerala

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page



Stories in this Section
Solar power to electrify 20,000 villages by 2007


Dumping duty on shrimp imports unfair, says industry
Shrimp exporters look elsewhere
Amarchand & Mangaldas bags Asia-Pacific Law Firm award
DRT lacks power to order arrest of a woman: HC
Massive discrepancy in crop output estimates
States urged to conserve mangroves
New site on excise tariff
Free trade pact with Singapore likely after polls
Singapore urged to apply strict rules of origin norms
IRDA puts TPAs on notice — Tougher rules to ensure prompt payment to hospitals
Andhra Bank card holders offered healthcare sop
HIV awareness to be made mandatory for driving licences
Minister to lay foundation stone for LPG cavern storage project
Oil industry seeks better port facilities
Nagarjuna Power seeks tariff approval for supply to Kerala
Blueprint for MSEB rejig next month
Another steel price hike in the offing
`World steel output may cross 1-b tonne'
Textile units seek low-cost funds for cotton purchase
IVRCL bags orders worth Rs 71 cr for Rajkot water project
IEI to have own building
Clarion lines up two malls in Delhi
Fiat on VAMBAY scheme
Independent directors: Chamber opposes panel recommendations
Chamber office-bearers
IPCL floor price set at Rs 170 per share — Retail investors to get 5 pc discount
Ganguly donates Rs 70 lakh for children's hospital
Bengal to set up three more industrial parks
`TPM vital in emerging sectors'
In Hyderabad today
New user-friendly system to apply for Australian visas
Decking it up
New UN body Chairman



The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2004, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line